Question

In order to determine the average price of hotel rooms in Atlanta, a sample of 64 hotels was selected. It was determined that the average price of the rooms in the sample was $112 with a standard deviation of $16. Use a 0.05 level of significance and determine whether or not the average room price is significantly different from $108.50.

Which form of the hypotheses should be used to test whether or not the average room price is significantly different from $108.50?
H0:
a. mu is greater than or equal to $108.50
b. mu is greater than $108.50
c. mu is less than $108.50mu is less than or equal to $108.50
d. mu is equal to $108.50mu is not equal to $108.50
Ha:
a. mu is greater than or equal to $108.50
b. mu is greater than $108.50mu is less than $108.50
c. mu is less than or equal to $108.50
d. mu is equal to $108.50mu is not equal to $108.50

Answer 1

H0 :

a. mu is greater than or equal to $108.50

Ha:

c. mu is less than or equal to $108.50

Explanation:

The correct order of the steps of a hypothesis test is given following

1. Determine the null and alternative hypothesis.

2. Select a sample and compute the z - score for the sample mean.

3. Determine the probability at which you will conclude that the sample outcome is very unlikely.

4. Make a decision about the unknown population.

These steps are performed in the given sequence

In the given scenario the test is to identify whether the average room price significantly different from $108.50. We take null hypothesis as mu is greater or equal to $108.50.